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Most filmmaking business plans are stupid. Why? Because most filmmakers have no idea how to project a possible return on investment.

Don’t feel bad. It’s not your fault.

Until five years ago, distribution was discriminatory, abusive and monopolistic. As a result, the old business model for indie filmmaking relied heavily on some 3rd party, middle-man distribution strategy. “If we are really lucky we will get into Sundance and get rich.”

These days, relying on a 3rd party middleman to buy your movie is like waiting for the Tooth Fairy. It’s a nice thought, but it’s not solid business. Instead, I recommend you answer these questions before you go into any production:

1. Who Is Your Target Audience?
2. How Large Is Your Target Audience?
3. How Will You Reach Your Audience?
4. What Is Your Marketing Strategy?
5. How Many VOD Sales to Break Even?

After you answer these questions, then make sure you incorporate your marketing costs into your initial budget.

You might ask: “What if I just want to make movies and sell my movie?”
My response: “1995 called and they want their dumb distribution plan back.”

Like it or not, the world of filmmaking has changed.

If you hate asking permission to become successful in your own moviemaking business, then make sure you sign up for the filmmaking stuff newsletter.

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As a filmmaker, independent film financing is a major mystery. When I was starting out, I met with quite a few producers who refused to share their money secrets with me… I don’t know why they were so secretive. But it really annoyed me.

Then there were other “experts” who talked about asking my dentist for money. Ugh.

Even though many filmmakers think getting money is somehow limited to the arena of filmmaking, it’s not. The truth is, all budding business professionals need to shake the money tree from time to time. So luckily for filmmakers, the world of business provides us with rules and resources for getting money.

The traditional ways people raise money in the United States, aside from going to a bank, is by meeting with an attorney, putting together some complex paperwork in-line with SEC regulations (Securities and Exchange Commission), meeting with prospective investors, building relationships and then asking for money – and hopefully getting a signed check!

If you have an idea for a screenplay you want to produce, or you have the rights to a screenplay, I hope you’ve taken some time to figure out how much money you’ll need to make your movie. Will you need over a million dollars, or can you make your project for much less?

This factor alone will determine your strategy.

If you don’t have a clue, then I suggest you contact someone to help you take your screenplay and perform an initial breakdown and schedule. From this information, you’ll be able to know (roughly) how much money you’ll need to complete your project.

Just keep in mind – If you’ve worked really hard to get your hands on a great script and you performed your initial breakdown, schedule and budget, your next step is to find ways to cut costs.

Why? Because with good business, any money you spend should be considered an investment that potentially brings in a good return. Think about it – if your movie is projected to return a mere 1.5% of investment dollars, then why invest in a movie? Why not just get a great savings account?

You must figure out ways to save money without sacrificing production value and story, and you’ll be closer to profitability. I emphasize cost cutting early in the process, because if you’re creative, then it’s possible to make a fancy looking movie for far less than the initial budget. How much less? That depends.

Remember, in many situations, you can replace cash limitations with creativity.

If you are looking for ideas on raising movie money, you might want to sign up for the official Filmmaking Stuff newsletter. I share a lot of modern moviemaking tips.  Find out more by clicking here   >>

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As a filmmaker, one of the toughest parts about making a movie is knowing where to start. The following film production checklist will give you an overview of the low budget, independent filmmaking process. If you want a copy for yourself, you can grab this PDF.

1. Read and study everything you can about the filmmaking process. Also study internet marketing. A good place to start is www.filmmakingstuff.com

2. Write or acquire a screenplay you want to produce.

3. Do an initial breakdown, schedule and budget of the project. How much does it cost?

4. Looking at the initial budget, is there anything you can get for a discount, or free, or barter?

5. Talk with a lawyer and figure out your best money strategy.

6. Following the law, go after the money. This will require strategy, persistence and enthusiasm.

7. This will be one of the tougher parts of the process, but it will make the movie possible.

8. Most people will want to know how the money is going to be spent, what they can expect in return and how will you eventually get their money back. Filmmaking is a risky business, full of unknowns and you should never sugar coat the potential risk involved in this business.

9. Have a plan for the movie when it is complete. Will you take the festival route? Will you market it to colleges and universities? Will you send it directly to sales agents and acquisition pros?

10. Were you able to get the money? If not, here are some (but not all) of your options.
A. Choose a new project.
B. Alter the screenplay to cut costs.

11. Get more favors and freebies.

12. Assuming you did get the money, pick a date for production.

13. Hire a lawyer to help you with contracts and releases. If you’re short on cash, do a web search for lawyers for the arts in your state.

14. Since many of these folks will be working for free, expect a lot of “no’s” before you find the right fit for your show.

15. You can make your jobs easier if you find someone with film production experience.

16. Finalize your script. Get it to a point where you aren’t going to keep changing things. Once you get to this point, consider it a locked script.

17. Number your scenes. Then break down your script, grabbing each element, location and character. Create a schedule.

18. From your schedule and breakdown, create a final budget. You probably know how much money you have to work with. If you find you don’t have enough you have two choices:
A. Get More Money!
B. Modify the script and schedule.

19. Get your crew. I suggest working with a seasoned Physical Producer / Line Producer / Production Manager to help you get organized. These folks will probably look at your schedule and tweak it.

20. Additionally, if you’re going to direct and product, having these folks around to help out will open the door to relationships with 1st ADs and crew. These folks will help you hire the right people. They may also know a thing or two about tax credits in your state. This could be invaluable!

21. I know. Money is tight. So instead of hiring a locations scout, you’re going to have to scout and procure locations yourself. This means you’ll knock on some doors and introduce yourself, your project and your goals.

22. It is at this point when I warn you – what can go wrong with a location probably will. So you will want to have a 2nd and 3rd location added to the mix. This way, should something happen, you’ll have a fall-back plan.

23. Assuming you’re directing this sucka yourself, you might find a director of photography who shares your sensibilities and has equal enthusiasm for the project.

24. Your DP will help you design a look and mood for your movie. Given your cost constraints, you’ll most likely shoot in HD.

25. MARKETING: Create a website specific to your movie. Make sure you have a way to get site visitors on your mailing list. Have a place for press, so that they can download your press kit and materials. Check out www.MovieSiteHost.com

26. Then as you get into production, you will be able to add a movie trailer. (Increase the size of your mailing list and establish a website you can later modify into a sales funnel.) To build your audience mailing list, check out www.AudienceList.com

27. If you’re lucky, you already know some talented actors interested in your project and working with you. You’ll have to work out a deal with these folks. LA and NYC offer various websites that help producers find actors. But if you’re in rural USA, you might have some difficulty with these options. I suggest partnering with local university drama departments and local theaters to fulfill your casting requirements.

28. Once you have all of your actors, you will want to find a location for a table read. Go through the script. If you wrote it, now is a time to take some notes for a final tweak. Just know – anything you change in the script also changes the budget and the schedule.

29. Seriously, don’t skimp on food. You will want someone in charge of Craft Services. They should be good at going out and getting deals on food and catering. If you can not find anyone to do this for you, you’ll have to do it yourself.

30. Make sure you have adequate food. If you’re doing a union shoot, there are guidelines and rules you must follow. If you’re doing a non- union indie, then some advice is: DON’T GET CHEAP! GET QUALITY!

31. Do you have all of your permits, releases, location agreements? Do you have production insurance? There are so many different types of insurance, it will make your head spin. Make sure you talk with some experienced professionals to make sure you have adequate insurance for your movie.

32. Meet with your Camera Department and find out how much tape stock you’ll need (assuming you’re shooting in HD or HDSLR). If you’re shooting film, which might be costly for your first feature – you’ll want to have an idea of these needs too.

33. Try to take as many naps as you can. This is a fun, but stressful time. So sleep. Exercise. Eat.

34. Once you have all the above stuff checked off the list, you’ll want to meet with your department heads and make sure everyone’s needs are being met. Assuming you’ve maintained limited locations, with a limited cast and crew, you will probably still be baffled by the amount of questions that come flying at you.

35. Seriously, you would think you’re making a gazillion dollar movie. But this is indication people care about their work. They care about the movie. And they want to make it a success.

36. This goes without saying, but don’t be a jerk. Seriously, you’re making a movie. It’s a real accomplishment and it’s one of those great things you can do in life. In fact, it’s quite awesome. So push forward. ENJOY!

37. Did I mention you need plenty of sleep?

38. Produce your movie. Do well. Don’t loose your temper and have fun!

39. During production, try to constantly get press to profile your movie. It would be great to create buzz, get people to your website and get them to opt into your newsletter mailing list. www.AudienceList.com

40. After the WRAP, have a wrap party. Don’t sleep with anybody or get drunk or make a fool of yourself! You’re a professional. Act like one.

41. After you recover from your hangover, you’ll probably start editing the movie. I suggest sharing the edit suite with another set of eyes.

42. Your first cut will be rough. Screen it with a group of people who have never seen the movie. Get feedback.

43. Take the feedback and refine your edit. After that, take a week off – don’t look at the movie or play around with it. Then, when you come back to the suite, refine and refine again.

44. Have another small screening with people who have never seen the movie. Take notes. Then take those notes back to your edit suite.

45. Add some sound FX to your movie. Clean up actor dialogue and rough areas. Remember, audio is often more important than visual.

46. Screen the movie again with a new, small set of people. Take notes. Go back and refine.

47. When you have a cut you’re happy with, then you can begin to plan your next strategy. For example, will you go to film festivals? Then you should have a target list in mind.

48. You may have several opportunities for traditional distribution. With some qualified professionals, analyze the deal. Find out if the deal will fit your business objectives, if not, move on to the next deal.

49. What if there are no deals? Hopefully you have a strong mailing list, a marketable hook and a plan for reaching your target demographic.

50. As such, refine your website into a sales funnel hub. Upload your movie to one of the many VOD sites and refine your movie poster and artwork. (To sell your movie via VOD, check out www.MovieSalesTool.com)

51. Also, upload your trailer to YouTube and all the other video sites on the internet. I prefer to stream from YouTube because I don’t have to pay the streaming bandwidth.

52. Write press releases related to the release of your movie. Have a blog component that details your movie and allows other people to comment.

53. Play around with your key words and Search Engine Optimization. (My next course?)

54. Create conversations on website forums related to your type of movie. DO NOT SPAM!!!

55. Create both a Facebook and MySpace page for your movie. The purpose of this page is to lead people back to your site.

56. Have a button on your website so people can tweet about your movie.

57. In addition to this, if you have the budget, purchase some offline advertising in publications related to your movie.

59. All of these methods are intended to get people back to your website. The purpose of your site is to get people to watch your movie trailer and click the BUY NOW button. Anything that distracts these visitors must go!

60. If they don’t click, then at least try to get them to opt into your mailing list.

61. Out of all the people who click the BUY NOW button, some will actually buy.

62. Consider using that money to purchase more advertising and repeat the process.

63. Sooner or later, you’ll figure out how to jump- start your next project. And you will realize that making movies and making money making movies is possible.

64. Tips from the trenches: On average it takes 7 meetings to make a relationship.

65. If you aren’t getting rejected every day, you are not working hard enough for your goals.

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If you like this filmmaking checklist, download a FREE copy by clicking here: Make Your Movie Checklist

Breaking down the script means you go through your screenplay, number each scene and highlight each element, including locations, characters, props, make up, wardrobe, picture vehicles and special FX…

All of these things cost money. And once the script is locked, any modification you make to the story or schedule, no matter how minor or major, will subsequently impact the budget.

My producer friend Forrest Murray always says the script, schedule and budget are the same document. You’ll need all three to make a movie… But in the process, if you change one document, you’re actually changing all three.

I’ll chat about this some more later. For today, let’s focus on your initial schedule so you can eventually get to your budget.

Schedule Your Movie And Save

1.After you highlight each element, you’ll want to figure out when you want to shoot your movie and how long you plan to shoot.

2.You can determine this by choosing how many pages you want to shoot per day. Then you can decide if you want to shoot 5 days on and 2 days off, or 6 days on and 1 day off. Or maybe you want to shoot your movie over a few weekends.

3.Everything in the script will impact your budget. There is software for this. Final Draft offers an add-on called Tagger. Tagger allows you to go through the script and pick out elements and highlight them in various colors. Once all elements are selected, you can eventually import this list into your budget and schedule software program.

4.After giving this your best effort, if you still feel stuck, seek expert advice.

5.Eventually, these elements will have a price in your initial budget. What is the price of each element? How much does your movie cost?

Many motion picture professionals make a living just breaking down, scheduling and budgeting movies. So it’s a pretty complicated and creative area. As a first time feature filmmaker, it save you many headaches if you partner with an seasoned 1st AD or Line Producer who could guide you through the process.

If this is not possible for you, I suggest reading every article on the subject as well as watching every YouTube video. This will teach you how to think like a cost conscious, responsible producer.

Regardless of your decision to complete your own breakdown or hire someone else for the job, the reason you’ll need an initial schedule is because this will give you a good starting point… You’ll utilize this information to figure out your budget. You’ll also be able to figure out if you need to cut an element or two, or not.

Cut Your Budget

Once you have your initial schedule, (and assuming this is your first feature), I suggest you create a budget for your movie in the neighborhood of $500K. Before you go crazy thinking this is a lot of money (or a little money), I want you to know you don’t actually have to spend $500K in hard cash to meet the needs of your budget.

In fact, once you determine you’ll make your movie at $500K, you are going to spend the next few weeks working backwards to see how much hard cash you can replace with sweat equity, discounts and favors from friends and family. Why $500K? Because if you actually have the elements budgeted, there is a good chance your movie will look better than if you budgeted for a mere $50K.

The reason for this is mostly psychological. By setting your budget at 500K, you’re going to start out with goal that forces you to get a higher production value than if you simply settled for pocket cash.

Later, with the application of tremendous creativity, it will be possible to reduce a $500K budget after discounts, free food, locations and salary adjustments quite significantly.

Do you have friends who own locations you can utilize for free? Do you have access to discounted equipment? Can you finish your movie faster than scheduled?

Do you have a friend with an edit suite?

Can you shoot some scenes outside during the day to reduce the need for extra lights? Can you find free food for your cast and crew? These are just some of the ways you can reduce that $500K budget.

One of my buddies was able to do this on the cheap. He had a location budgeted for $5K. However, after my buddy spoke with the owner of the location, the fee was reduced to zero. How? My buddy (a creative producer) agreed to shoot a promo for the owner’s business. Another filmmaker friend got free food for his entire shoot simply by asking.

The food supplier was thanked in the credits.

Deals like this happen. But it takes creativity to find opportunity. Here are some questions to ask:

How much money do I have?
How can I reduce expenses?
Can I get free food?
Who do I know who has the location I’m looking for?
How much money will I need?

The other reason you want to keep your first feature budget low is to allow greater opportunity for return. In the event you get a standard distribution deal (which is becoming more and more rare), your movie should look expensive.

If your budget is $500K and the movie looks like $500K, but you only spent $50K or $30K $15K in ultra-low-budget hard cash, and someone pays you back your budget, then you just made a crazy profit!

Nice work.

And in the event you do not get a standard distribution deal, then you’re not quite as deep in the financial hole as you otherwise would be.

If you’ve made a movie or you’re working to make your movie (and I hope you are), you might also be thinking about how you’re going to sell the sucker.

I mean, despite the fact that filmmaking is fun there is a business component to it. If you fail to think in terms of Return On Investment (ROI), then getting money for your next movie is going to be even more difficult than the first, for two reasons:

1. You’ll need to worry about money to put food on the table.
2. Your prospective investors will want to see your track record.

As a filmmaker, the other factor we have to consider is our initial budget. Go too high and the chance of return could diminish. Let me explain.

I’ve chatted with a few heavy-hitting friends in the industry (that I hope to interview soon) and there is talk about what I’m going to call the “no-man’s-land” of indie movie production. That is, there is a budget range from roughly 2.5M-10M that is becoming increasingly difficult to finance.

Tax credits and other deals aside – What I’m suggesting is due, in large part to changes in movie distribution and the subsequent challenge of generating enough revenue to recoup the initial investment.

Indie film financing was always a crap shoot – but take away potential sales channels and add the fact that technology now permits virtually anyone to make a decent looking movie and you can begin to understand why this is happening.

While I’m on the subject, I’m not just talking about the indie movies. I’m including studios as well. Thanks to the success of Paranormal Activity,  there is now word that Paramount is going to launch a micro budget division and begin to churn out movies under 100K.

From a business standpoint this makes sense. You invest 100K and you get 100M – That’s pretty good! (Understatement).  But from holy crap perspective, the ripple effect of a studio churning out no-to-low budget movies could potentially rip a hole in the ways Hollywood traditionally operates. (BTW, Paramount is not the first studio to attempt this. But thanks to VOD outlets and more digital projectors in theaters, what didn’t work at this budget level in the past could very well work now.)

Lets talk some numbers…

Traditionally, when movies are financed most people including grips, gaffers, craft services and other crew – they get paid on the front end as part of the movie’s budget. We can also include some agents, managers, lawyers, Teamsters, writers, actors – and mostly everyone else too.

On the micro budget level however, there isn’t enough money up-front to pay these folks what they were formally worth. So there are a few options. Hire less people. Hire non-union folks. And offer to pay Teamsters deferred pay with the added bonus of copy and credit. (I’m adding some humor here – but can you imagine Paramount trying to offer a Teamster deferred pay?)

Ok, so what does this mean for you and your movies? Well just look at the music industry. Recording studios and record companies took a nose dive. But that hasn’t stopped people from making music or making money making music.

Instead of asking some idiot in a suit for permission to make music, musicians can now find their audiences, build a following and sell their music… Without a middle man – globally. That’s pretty amazing.

The same wide open world applies to your movie. Do good work and people will notice. Do bad work, and well, you still have the opportunity to find the 20 people in the world who think you’re brilliant. And in terms of pay structure – I made a joke earlier about deferred pay. But I am not totally opposed to some well structured back end deals. I mean, 1/4th of 1% of 100M is – it’s nothing to sneeze at.

Of course, as we all know there is no guarantee that any movie project will make money. So for you and me and most indies, it will take roughly two years of hustle to churn out a movie that we can be proud of. For the studios, they are going to churn out micro-budget movies like widgets in a factory.  The odds of success, for both of us  – the indie filmmakers and the studio are getting closer equal.

And I think that is something worth celebrating.

Is anyone else excited about this? Please feel free to comment.